South Korea's Single-Stock Leverage ETFs Hit 11.89 Trillion Won, Account for 44% of Daily KOSPI Turnover

According to Yonhapinfomax, as of July 8, single-stock leverage ETF products in South Korea had combined net assets of 11.89 trillion won, with 16 products listed since late May. Forward-facing 2x leverage products comprised 11.6 trillion won of the total, while inverse -2x products accounted for 270 billion won. On July 7, these products represented 44.11% of combined KOSPI and KOSDAQ trading volume at 15.6 trillion won in daily turnover.

Despite concerns that rebalancing activity drives market volatility, industry analysts note actual supply-demand impact is limited. Daily rebalancing volumes for Samsung Electronics and SK Hynix—the two underlying assets—are estimated at 500 billion and 900 billion won respectively, representing only 4.6% to 6.2% of their average daily trading volumes. Market participants counter that retail investors' contrarian buy-low-sell-high behavior and foreign arbitrage activity offset much of the rebalancing effect.